<PAGE>
Message From The Investment Adviser Brenton Mutual Funds
- -------------------------------------------------------------------------------
Dear Shareholders:
For much of the last six months, the financial markets have been braced for a
stronger economy, higher interest rates and higher inflation. These
expectations have been driven by larger-than-expected payroll gains, a drop in
the unemployment rate and an increased focus on the prospects for rising wage
inflation. The economy certainly gained strength during the first half of the
year, particularly during the second quarter, when GDP growth registered a
strong 4.7%. Low mortgage rates at the beginning of the year, increased
mortgage refinancings, larger tax refunds, increased auto rebates and a
rebound from the strikes at Boeing and GM all served to push the economy
forward during the first six months of the year.
During most of the third quarter, investors debated whether the Federal
Reserve would raise interest rates to slow the economy to avert potential
inflationary pressures. Most market strategists were expecting the Fed to
raise interest rates by 25 basis points (0.25%) in September. However, in
somewhat of a surprise to Wall Street, the Fed decided to leave rates
unchanged, having concluded that the economy was not in immediate danger of
overheating. We believe the Fed acted correctly by deciding not to raise
rates, especially when rising inflation is not evident and there are mounting
signs that the economy is slowing from its faster pace in the first half of
the year.
Third quarter GDP growth rose at a 2.2% annual rate, less than half the pace
during the second quarter and recent economic reports are suggesting slower
growth ahead. For example, the employment report for September showed a
surprising loss of 40,000 jobs versus expectations for a gain of 170,000. The
last time the economy lost jobs was in January, when employment fell by
66,000. Retail sales appear to be losing steam after strengthening during the
first half of the year. The annual rate of change in retail inventories is
beginning to rise after falling steadily since the middle of 1995. Automobile
sales, for example, are plateauing and further upward momentum appears
unlikely since pent-up demand for autos has been largely satisfied. In
addition, manufacturing industrial production has been slowing over the last
four months and the National Association of Purchasing Managers Survey is down
from its peak last June. Industrial commodity prices have also been in a
weakening trend since the end of August. Lastly, consumer credit card debt
service is at a record high. Consumer delinquencies and bankruptcies have
risen strongly, and banks are now tightening up on consumer credit. High
consumer debt levels could slow consumer spending going forward.
While we expect economic growth to slow, we are not expecting a recession. For
now, our outlook calls for a sluggish economy, with little or no inflationary
pressure accompanied by declining long-term interest rates.
SHARES OF THE FUNDS ARE NOT FDIC INSURED, NOR ARE THEY INSURED BY ANY
GOVERNMENT AGENCY. FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, BRENTON BANK OR ITS AFFILIATES. AN INVESTMENT IN
THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.
THE BRENTON MUTUAL FUNDS ARE A FAMILY OF MUTUAL FUNDS DISTRIBUTED BY BISYS
FUND SERVICES WHICH IS INDEPENDENT OF BRENTON BANK AND ITS AFFILIATES. BRENTON
BROKERAGE IS A REGISTERED BROKER-DEALER FROM WHOM SHARES OF THE BRENTON MUTUAL
FUNDS MAY BE PURCHASED.
- -------------------------------------------------------------------------------
-1-
<PAGE>
Message From The Investment Adviser Brenton Mutual Funds
- --------------------------------------------------------------------------------
INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND AND INTERMEDIATE TAX-FREE FUND
During the last six months, long-term interest rates have been locked in a
narrow trading range. The yield on the 30-year Treasury bond ranged from a low
of 6.80% to a high of 7.10%. We have been impressed that long-term bond yields
have failed to break out on the upside of this trading range even though
expectations for stronger economic activity and an accompanying interest-rate
hike by the Fed strengthened during the period. We believe, however, that
expectations may now be in the process of changing. The surprising loss of
40,000 jobs in September may be the catalyst that turns the bond market toward
a bullish stance in the coming months. A decline in payroll employment for
September certainly was not expected and will cause many participants in the
bond market to question the view that interest rates can still move higher. As
we have written previously, we expected the economy to slow in the second half
of the year and interest rates to move lower as fears of rising inflation
subside. We would not be surprised to see weaker economic reports in the months
ahead, which could push interest rates to new lows.
During the last six months, we have maintained a longer average maturity in the
Intermediate U.S. Government Securities Fund in anticipation of a decline in
long-term interest rates. If interest rates decline as we expect, we will
gradually shorten the average maturity of the Fund. During the period, we
eliminated the Fund's exposure to callable securities in order increase the
Fund's capital appreciation potential in a declining interest-rate environment.
We continue to maintain high credit quality in both the Intermediate U.S.
Government Securities Fund and the Intermediate Tax-Free Fund. All securities
held in the Intermediate U.S. Government Securities Fund are rated AAA, and the
average credit quality of the holdings in the Intermediate Tax-Free Fund is AA.
VALUE EQUITY FUND
The stock market declined precipitously during July on fears of slowing
corporate earnings growth. By the middle of July 1996, the S&P 500 Index was
down nearly 8.0% from the beginning of the month before rallying to end the
month with a smaller decline of 4.4%. Small-company stocks fared the worst
during the "mini-correction" as investors fled to larger, stable growth
companies. However, Wall Street later decided that overall earnings growth was
still healthy and that earnings disappointments were limited to only a few
companies. The stock market rebounded sharply during September, helped by a
decline in long-term interest rates and improved investor sentiment regarding
corporate earnings.
After the earnings disappointments that were announced in July, we have
observed that investors are favoring companies that can generate strong and
predictable earnings growth. Investors are willing to pay increasingly higher
price/earnings ratios for companies that have the best earnings reliability.
Valuation is less of a concern as market leadership looks to be narrowing into
a group of highly favored growth companies.
During the last six months, we increased the Fund's holdings in high-quality
growth companies that have a solid history of producing consistent earnings
growth regardless of the economic environment. Examples of stocks purchased
include ConAgra, Sara Lee, Sherwin Williams, American Home Products, Reliastar
Financial, Casey's General Stores, Pitney Bowes and PepsiCo. Due to our outlook
for slower economic growth, we continue to underweight consumer cyclicals,
capital goods and basic industries.
In our view, the overall environment for stocks should remain positive in the
foreseeable future. Although corporate earnings growth is slowing from the
double-digit rates of 1993-95, we do not expect a major collapse in earnings.
Additionally, if the economy slows from its quicker pace in the first half of
the year, interest rates should move lower which would help support stock
prices.
- --------------------------------------------------------------------------------
-2-
<PAGE>
Message From The Investment Adviser Brenton Mutual Funds
- -------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
The Federal Reserve last adjusted monetary policy in January, when it lowered
the target Fed Funds rate by 25 basis points (0.25%) to 5.25%. Since then, the
Fed has remained neutral in response to recent signs that economic growth may
be slowing. In the near term, we expect the Fed to remain neutral and short-
term interest rates to stay at current levels. If the Fed does take action, we
believe there is a greater likelihood that the next Fed move will be to lower
interest rates. We continue to maintain high credit quality in the U.S.
Government Money Market Fund and have invested only in direct obligations of
the U.S. Government or its agencies.We would like to thank all of our share
holders for investing in the Brenton Mutual Funds.
We appreciate the opportunity to serve your investment needs and will work
hard to continue to earn your confidence and support. If you have questions,
would like a prospectus, or require any assistance, please contact your
investment representative or call 1-800-706-FUND.
Sincerely,
/s/ James T. Richards
James T. Richards
Vice President and Trust Investment Officer
FOR MORE COMPLETE INFORMATION ON ANY OF THE BRENTON MUTUAL FUNDS, INCLUDING
FEES, EXPENSES AND SALES CHARGES, PLEASE CALL 1-800-706-FUND FOR A FREE
PROSPECTUS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING OR SENDING
MONEY.
THE INVESTMENT RETURN AND NET ASSET VALUE (NAV) WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST. THE COMPOSITION OF THE FUNDS' HOLDINGS IS SUBJECT TO CHANGE.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. YIELDS WILL FLUCTUATE, AND THERE CAN BE NO ASSURANCE THAT THE FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE (NAV) OF $1 PER SHARE.
- -------------------------------------------------------------------------------
-3-
<PAGE>
TABLE OF CONTENTS
Statements of Assets and Liabilities
Page 5
Statements of Operations
Page 6
Statements of Changes in Net Assets
Page 7
Schedules of Portfolio Investments
Page 9
Notes to Financial Statements
Page 16
Financial Highlights
Page 21
-4-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE VALUE
MONEY MARKET SECURITIES TAX-FREE EQUITY
FUND FUND FUND FUND
--------------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(cost $32,324,484;
$32,790,404; $7,318,849
and $30,529,129,
respectively).......... $32,324,484 $32,333,305 $7,395,563 $36,550,470
Interest and dividends
receivable............. 17,832 509,801 107,009 76,449
Receivable for capital
shares issued.......... -- -- -- 9,550
Prepaid expenses and
other assets........... 2,965 5,210 3,750 4,107
----------- ----------- ---------- -----------
Total Assets........ 32,345,281 32,848,316 7,506,322 36,640,576
----------- ----------- ---------- -----------
LIABILITIES:
Dividends payable....... 125,618 144,398 24,793 77,779
Payable for capital
shares redeemed........ 354 -- -- 4,892
Accrued expenses and
other payables:
Investment advisory
fees................. 4,083 12,061 -- 20,088
Administration fees... 1,867 1,757 407 1,956
Distribution and
shareholder service
fees................. 1,361 1,327 -- 1,435
Custodian, accounting
and transfer agent
fees................. 6,104 6,075 5,375 6,505
Legal and audit fees.. 12,840 12,817 2,929 12,003
Other................. 8,507 8,317 2,487 6,848
----------- ----------- ---------- -----------
Total Liabilities... 160,734 186,752 35,991 131,506
----------- ----------- ---------- -----------
NET ASSETS:
Capital................. 32,184,016 33,113,748 7,388,079 29,918,792
Undistributed net
investment income...... -- 29,855 5,159 3,824
Net unrealized
appreciation
(depreciation) from
investments............ -- (457,099) 76,714 6,021,341
Accumulated
undistributed net
realized gains (losses)
from investment
transactions........... 180 (24,940) 379 565,114
----------- ----------- ---------- -----------
Net Assets.......... $32,184,196 $32,661,564 $7,470,331 $36,509,071
=========== =========== ========== ===========
Outstanding units of
beneficial interest
(shares)............... 32,184,718 3,261,449 738,612 2,688,513
=========== =========== ========== ===========
Net asset value--
redemption price per
share.................. $ 1.00 $ 10.01 $ 10.11 $ 13.58
=========== =========== ========== ===========
Maximum Sales Charge.... 3.50% 3.50% 4.50%
=========== ========== ===========
Maximum Offering Price
(100%/(100%-Maximum
Sales Charge) of net
asset value adjusted to
nearest cent) per
share.................. $ 1.00(a) $ 10.37 $ 10.48 $ 14.22
=========== =========== ========== ===========
</TABLE>
- ------
(a) Offering price and redemption price are the same for the U.S. Government
Money Market Fund.
See notes to financial statements.
-5-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE
MONEY MARKET SECURITIES TAX-FREE VALUE EQUITY
FUND FUND FUND FUND
--------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income......... $ 808,106 $1,115,945 $179,752 $ 1,362
Dividend income......... 25,884 16,074 2,076 378,986
--------- ---------- -------- ----------
Total Income.......... 833,990 1,132,019 181,828 380,348
--------- ---------- -------- ----------
EXPENSES:
Investment advisory
fees................... 62,494 74,968 14,679 119,163
Administration fees..... 31,246 33,312 7,339 33,888
Distribution and
shareholder services
fees................... 78,117 83,247 18,349 85,090
Custodian and accounting
fees................... 21,798 20,673 25,124 19,573
Legal and audit fees.... 8,424 8,706 1,572 9,357
Organization costs...... 3,087 609 189 637
Trustees' fees and
expenses............... 654 732 183 627
Transfer agent fees..... 16,536 13,905 10,509 20,910
Registration and filing
fees................... 1,962 3,921 549 2,928
Printing costs.......... 5,442 5,570 815 5,749
Other................... 993 810 183 732
--------- ---------- -------- ----------
Total Expenses........ 230,753 246,453 79,491 298,654
Expenses voluntarily
reduced................ (109,364) (74,919) (33,028) (76,619)
--------- ---------- -------- ----------
Total expenses before
expense
reimbursement........ 121,389 171,534 46,463 222,035
Expense reimbursement... -- -- (18,876) --
--------- ---------- -------- ----------
Total Expenses........ 121,389 171,534 27,587 222,035
--------- ---------- -------- ----------
Net Investment Income... 712,601 960,485 154,241 158,313
--------- ---------- -------- ----------
REALIZED/UNREALIZED
GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains
(losses) from
investment
transactions........... (7) (7,837) 379 684,195
Net change in unrealized
appreciation
(depreciation) from
investments............ -- (436,882) (37,949) 954,630
--------- ---------- -------- ----------
Net realized/unrealized
gains (losses) from
investments............ (7) (444,719) (37,570) 1,638,825
--------- ---------- -------- ----------
Change in net assets
resulting from
operations............. $ 712,594 $ 515,766 $116,671 $1,797,138
========= ========== ======== ==========
</TABLE>
See notes to financial statements.
-6-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT MONEY U.S. GOVERNMENT
MARKET FUND SECURITIES FUND
---------------------------- -------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31,
1996 1996 1996 1996
------------- ------------- ------------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 712,601 $ 1,742,090 $ 960,485 $ 1,702,592
Net realized gains
(losses) from
investment
transactions.......... (7) 129 (7,837) 52,778
Net change in
unrealized
appreciation
(depreciation) from
investments........... -- -- (436,882) (98,776)
------------ ------------- ----------- -----------
Change in net assets
resulting from
operations............ 712,594 1,742,219 515,766 1,656,594
------------ ------------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income................ (712,601) (1,742,090) (963,118) (1,681,389)
Dividends to
shareholders from net
realized gains from
investment
transactions........... -- -- -- --
------------ ------------- ----------- -----------
Change in net assets
from shareholder
distributions.......... (712,601) (1,742,090) (963,118) (1,681,389)
------------ ------------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................ 37,120,281 113,364,161 3,558,365 23,288,320
Dividends reinvested... 71,031 64,614 202,202 295,157
Cost of shares
redeemed.............. (40,443,097) (105,802,190) (5,041,851) (5,606,941)
------------ ------------- ----------- -----------
Change in net assets
from share
transactions.......... (3,251,785) 7,626,585 (1,281,284) 17,976,536
------------ ------------- ----------- -----------
Change in net assets... (3,251,792) 7,626,714 (1,728,636) 17,951,741
NET ASSETS:
Beginning of period.... 35,436,339 27,809,625 34,390,200 16,438,459
------------ ------------- ----------- -----------
End of period.......... $ 32,184,547 $ 35,436,339 $32,661,564 $34,390,200
============ ============= =========== ===========
SHARE TRANSACTIONS:
Issued................. 37,120,281 113,364,161 355,792 2,259,352
Reinvested............. 71,031 64,614 20,231 28,770
Redeemed............... (40,442,746) (105,802,190) (504,701) (544,042)
------------ ------------- ----------- -----------
Change in shares........ (3,251,434) 7,626,585 (128,678) 1,744,080
============ ============= =========== ===========
</TABLE>
See notes to financial statements.
-7-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE VALUE EQUITY
FUND FUND
------------------------ -------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31,
1996 1996 1996 1996
------------- ---------- ------------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.... $ 154,241 $ 274,243 $ 158,313 $ 192,540
Net realized gains
(losses) from investment
transactions............ 379 6,999 684,195 900,818
Net change in unrealized
appreciation
(depreciation) from
investments............. (37,949) 108,143 954,630 4,109,404
---------- ---------- ----------- -----------
Change in net assets
resulting from
operations............... 116,671 389,385 1,797,138 5,202,762
---------- ---------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income.................. (154,170) (271,491) (154,249) (190,473)
Dividends to shareholders
from net realized gains
from investment
transactions............. -- (1,113) -- (1,166,653)
---------- ---------- ----------- -----------
Change in net assets from
shareholder
distributions............ (154,170) (272,604) (154,249) (1,357,126)
---------- ---------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.................. 457,627 1,668,561 4,931,796 14,541,750
Dividends reinvested..... 3,834 5,982 96,386 860,805
Cost of shares redeemed.. (356,836) (796,391) (2,514,882) (2,523,709)
---------- ---------- ----------- -----------
Change in net assets from
share transactions...... 104,625 878,152 2,513,300 12,878,846
---------- ---------- ----------- -----------
Change in net assets..... 67,126 994,933 4,156,189 16,724,482
NET ASSETS:
Beginning of period...... 7,403,205 6,408,272 32,352,882 15,628,400
---------- ---------- ----------- -----------
End of period............ $7,470,331 $7,403,205 $36,509,071 $32,352,882
========== ========== =========== ===========
SHARE TRANSACTIONS:
Issued................... 45,261 164,077 373,426 1,193,101
Reinvested............... 379 588 7,321 70,242
Redeemed................. (35,313) (78,353) (191,040) (206,938)
---------- ---------- ----------- -----------
Change in shares.......... 10,327 86,312 189,707 1,056,405
========== ========== =========== ===========
</TABLE>
See notes to financial statements.
-8-
<PAGE>
THE COVENTRY GROUP
BRENTON U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (98.0%):
Federal Farm Credit Bank:
$5,000,000 5.17%, 10/10/96........................................ $ 4,993,537
3,125,000 5.36%, 10/21/96........................................ 3,115,694
2,000,000 5.20%, 10/22/96........................................ 1,993,933
2,500,000 5.27%, 11/6/96......................................... 2,486,825
1,500,000 5.85%, 8/1/97.......................................... 1,501,120
Federal Home Loan Bank:
1,000,000 5.36%, 10/9/96......................................... 998,809
5,000,000 5.36%, 10/22/96........................................ 4,984,367
1,075,000 5.36%, 10/28/96........................................ 1,070,678
1,500,000 5.21%, 1/10/97......................................... 1,478,075
2,000,000 5.25%, 2/7/97.......................................... 1,962,375
2,000,000 5.46%, 2/21/97......................................... 1,956,623
Tennessee Valley Authority:
$5,000,000 5.27%, 10/10/96....................................... $ 4,993,413
-----------
Total U.S. Government Agencies 31,535,449
-----------
INVESTMENT COMPANIES (2.4%):
789,035 Dreyfus Treasury Prime Money Market Fund............. 789,035
-----------
Total Investment Companies 789,035
-----------
Total (Cost--$32,324,484) (a) $32,324,484
===========
</TABLE>
- ------
Percentages indicated are based on net assets of $32,184,196.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
See notes to financial statements.
-9-
<PAGE>
THE COVENTRY GROUP
BRENTON INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (3.1%):
Federal National Mortgage Assoc.:
$1,000,000 8.00%, 8/25/06........................................ $ 1,000,310
-----------
Total Collateralized Mortgage Obligations 1,000,310
-----------
U.S. GOVERNMENT AGENCIES (76.9%):
Federal Farm Credit Bank:
500,000 6.10%, 7/24/00........................................ 491,965
Federal Home Loan Bank:
1,000,000 7.02%, 7/6/99......................................... 1,015,800
500,000 7.00%, 6/20/01........................................ 506,885
1,000,000 7.44%, 8/10/01........................................ 1,032,170
2,000,000 6.50%, 6/5/02......................................... 1,985,120
1,000,000 6.89%, 4/6/04......................................... 1,002,800
1,000,000 7.36%, 7/1/04......................................... 1,028,840
1,000,000 7.32%, 4/21/05........................................ 1,025,150
500,000 6.85%, 5/26/05........................................ 497,700
3,000,000 6.32%, 6/28/05........................................ 2,882,070
1,000,000 6.15%, 11/28/05....................................... 948,360
Federal Home Loan Mortgage Corp.:
1,500,000 6.55%, 10/2/02........................................ 1,492,245
1,000,000 6.20%, 4/15/03........................................ 968,490
1,000,000 6.75%, 8/1/05......................................... 988,810
1,000,000 5.90%, 2/14/06........................................ 928,550
1,000,000 6.28%, 3/6/06......................................... 952,900
1,340,271 6.50%, 7/1/08, Pool# 000228........................... 1,308,896
1,862,424 7.50%, 12/1/25, Pool# 250410.......................... 1,841,304
Federal National Mortgage Assoc.:
700,000 6.85%, 4/5/04......................................... 700,329
463,855 7.00%, 5/25/06........................................ 462,403
775,659 6.50%, 3/1/09, Pool# 190705........................... 755,453
1,448,104 7.00%, 11/1/10, Pool# 250387.......................... 1,431,986
Government National Mortgage Assoc.:
885,220 7.00%, 5/1/10, Pool# 2025............................. 872,039
-----------
Total U.S. Government Agencies 25,120,265
-----------
U.S. TREASURY NOTES (16.2%):
4,500,000 6.38%, 1/15/99........................................ 4,521,690
750,000 7.25%, 5/15/04........................................ 776,475
-----------
Total U.S. Treasury Notes 5,298,165
-----------
INVESTMENT COMPANIES (2.8%):
914,565 Goldman Federal Money Market Portfolio................ 914,565
-----------
Total Investment Companies 914,565
-----------
Total (Cost--$32,790,404) (a) $32,333,305
===========
</TABLE>
- ------
Percentages indicated are based on net assets of $32,661,564.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........... $ 128,995
Unrealized depreciation........... (586,094)
---------
Net unrealized depreciation....... $(457,099)
=========
</TABLE>
See notes to financial statements.
-10-
<PAGE>
THE COVENTRY GROUP
BRENTON INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ----------
<C> <S> <C>
MUNICIPAL BONDS (97.7%):
Arizona (1.2%):
$ 90,000 Scottsdale, Street & Highway User Revenue, 4.75%,
7/1/00................................................ $ 90,450
----------
California (1.4%):
100,000 Los Angeles, GO, Series A, 5.50%, 9/1/04............... 103,750
----------
Colorado (2.7%):
100,000 Jefferson County Public Library, 5.00%, 12/1/03........ 100,375
100,000 Pueblo County, School District #60, 4.50%, 12/1/99..... 100,000
----------
200,375
----------
District of Columbia (1.4%):
100,000 District of Columbia, GO, Series C, 5.25%, 6/1/01...... 101,125
----------
Florida (2.7%):
200,000 Florida State Board of Education Capital Outlay, 5.75%,
6/1/09, callable 6/1/04 @ 101......................... 203,750
----------
Hawaii (1.3%):
100,000 Honolulu City & County, Series A, 4.70%, 1/1/98........ 100,375
----------
Illinois (8.1%):
200,000 Cook County, Community School District #217, 5.25%,
12/1/04............................................... 202,750
200,000 Illinois State, 5.50%, 8/1/03.......................... 205,750
100,000 Illinois State Metropolitan Pier & Exposition
Authority, 5.05%, 6/15/98............................. 101,000
100,000 Peoria, Downtown Redevelopment, Series B, 5.30%,
12/1/08............................................... 98,000
----------
607,500
----------
Indiana (5.4%):
200,000 Concord Community Schools Building Corp., 5.30%,
1/1/04................................................ 203,000
200,000 Indiana Bond Bank, 5.25%, 2/1/01....................... 202,750
----------
405,750
----------
Iowa (14.7%):
200,000 Ames, GO, 5.20%, 6/1/05, callable 6/1/03 @ 100......... 201,500
110,000 Ames Hospital, Revenue Bonds, 5.70%, 8/15/00........... 113,575
100,000 Davenport, GO, Series A, 4.80%, 6/1/04, callable 6/1/01
@ 100................................................. 98,500
80,000 Davenport Hospital, Facility Revenue, 5.10%, 7/1/97.... 80,610
100,000 Davenport, Series A, 5.40%, 6/1/06, callable 6/1/02 @
100................................................... 100,750
100,000 Des Moines Hospital, Revenue Bonds, 5.00%, 8/15/05..... 98,500
100,000 Iowa Higher Education Loan Authority Revenue, Private
College Facilities, 6.00%, 8/1/07..................... 100,113
150,000 Ottumwa, Community School District, 5.10%, 6/1/04...... 152,250
50,000 Polk County, GO, 6.10%, 6/1/99, callable 6/1/98 @ 100.. 51,312
100,000 Sioux City School District, 5.00%, 6/1/01.............. 101,250
----------
1,098,360
----------
</TABLE>
Continued
-11-
<PAGE>
THE COVENTRY GROUP
BRENTON INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Maryland (2.1%):
$ 50,000 Maryland State, Fourth Series, 6.55%, 10/15/97......... $ 51,354
100,000 Prince Georges County, 5.40%, 1/15/01.................. 102,750
----------
154,104
----------
Massachusetts (2.1%):
100,000 Massachusetts, 5.50%, 6/1/05........................... 102,750
50,000 Massachusetts State Water Authority, 7.00%, 4/1/99..... 52,813
----------
155,563
----------
Minnesota (8.7%):
150,000 Bloomington, Ref-Highway, 6.00%, 12/1/99............... 157,312
250,000 Hennepin County, GO, 5.90%, 12/1/96.................... 250,968
90,000 Rosemount, Port Authority, 5.50%, 2/1/06, callable
2/1/03 @ 100.......................................... 91,125
150,000 Southern Minnesota Municipal Power Agency, Series B,
5.00%, 1/1/98......................................... 150,750
----------
650,155
----------
Nebraska (1.7%):
125,000 Omaha, Public Power District, Series B, 4.80%, 2/1/01.. 125,313
----------
Nevada (2.6%):
200,000 Nevada State University, GO, 4.30%, 8/1/02............. 193,500
----------
New Mexico (1.3%):
100,000 Albuquerque, School District #12, 4.20%, 8/1/99........ 99,250
----------
New York (2.7%):
100,000 Hempstead Town, Series A, 5.40%, 3/1/05, callable
3/1/02 @ 102.......................................... 102,125
100,000 New York State Dormitory Authority Revenues, 5.50%,
5/15/06............................................... 101,625
----------
203,750
----------
North Carolina (2.7%):
200,000 North Carolina Municipal Power Agency, 5.90%, 1/1/03... 205,250
----------
North Dakota (0.9%):
75,000 West Fargo, Series D, 4.00%, 5/1/02, callable 5/1/97
@ 100.................................................. 70,594
----------
Pennsylvania (1.4%):
100,000 Bensalem Township, Water & Sewer Revenue, 5.90%,
12/1/04, callable 12/1/02 @ 100....................... 104,000
----------
Rhode Island (1.4%):
100,000 Providence, GO, 6.10%, 9/1/98.......................... 103,125
----------
South Carolina (2.7%):
200,000 Piedmont Municipal Power South Carolina Electric,
5.00%, 1/1/01......................................... 198,500
----------
South Dakota (1.4%):
100,000 South Dakota Housing Development Authority, Series E,
5.80%, 5/1/03......................................... 102,375
----------
</TABLE>
Continued
-12-
<PAGE>
THE COVENTRY GROUP
BRENTON INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Texas (9.1%):
$100,000 Corpus Christi Authority, 4.90%, 12/1/01............... $ 100,750
25,000 Dallas, GO, 7.00%, 8/15/99, callable 8/15/97 @ 100..... 25,696
200,000 Houston, Series C, 5.80%, 3/1/02....................... 209,000
100,000 McLennan County, GO, 6.25%, 6/1/97..................... 101,564
100,000 Tarrant County, Water Revenue Bonds, 5.70%, 3/1/01..... 104,000
100,000 Texas State, Series B, 5.00%, 10/1/03.................. 100,625
35,000 Texas State National Research Laboratory, 6.90%,
4/1/98................................................ 36,400
----------
678,035
----------
Washington (7.3%):
100,000 Grant County, Public Utility, 5.10%, 1/1/00............ 101,125
150,000 Seattle Municipal Light & Power Revenue, 6.00%, 7/1/99. 155,812
100,000 Washington State, Series R-93B, 4.88%, 10/1/02......... 100,250
185,000 Washington State Housing Finance Revenue, Series 1A-1,
5.05%, 6/1/00......................................... 186,850
----------
544,037
----------
Wisconsin (10.7%):
50,000 Ashland, School District, 5.90%, 4/1/00................ 52,188
35,000 Beloit, GO, 5.55%, 4/1/00.............................. 35,962
100,000 Kenosha County, Series E, 5.70%, 11/1/08, callable
11/1/03 @ 100......................................... 101,875
200,000 Madison, 5.30%, 10/1/01................................ 206,250
100,000 Milwaukee County, Series A, 5.50%, 12/1/06, callable
12/1/04 @ 100......................................... 101,000
200,000 Wisconsin Housing & Economic Development Authority,
Series D, 5.75%, 1/1/04............................... 201,500
100,000 Wisconsin State, GO, Series 1, 4.40%, 5/1/98........... 100,375
----------
799,150
----------
Total Municipal Bonds 7,298,136
----------
INVESTMENT COMPANIES (1.3%):
97,427 Benchmark Tax Exempt Money Market Portfolio............ 97,427
----------
Total Investment Companies 97,427
----------
Total (Cost--$7,318,849) (a) $7,395,563
==========
</TABLE>
- ------
Percentages indicated are based on net assets of $7,470,331.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............. $86,519
Unrealized depreciation.............. (9,805)
-------
Net unrealized appreciation.......... $76,714
=======
</TABLE>
GO--General Obligation
See notes to financial statements.
-13-
<PAGE>
THE COVENTRY GROUP
BRENTON VALUE EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ----------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (91.0%):
Auto Parts (1.5%):
6,000 TRW, Inc................................................... $ 558,000
-----------
Banks (3.6%):
8,000 BankAmerica Corp........................................... 657,000
20,000 Barnett Banks, Inc......................................... 675,000
-----------
1,332,000
-----------
Beverages (2.7%):
17,400 Anheuser-Busch Co.......................................... 654,675
12,000 PepsiCo, Inc............................................... 339,000
-----------
993,675
-----------
Business Equipment & Services (1.9%):
21,400 WMX Technologies........................................... 703,525
-----------
Capital Equipment (2.0%):
10,000 Illinois Tool Works........................................ 721,250
-----------
Chemicals--Specialty (5.5%):
8,000 Eastman Chemical Co. ...................................... 467,000
10,900 Great Lakes Chemical Corp. ................................ 621,300
8,000 IMC Global, Inc............................................ 313,000
10,500 Sigma Aldrich Corp......................................... 598,500
-----------
1,999,800
-----------
Communications Equipment (1.0%):
7,000 Pitney Bowes, Inc. (b)..................................... 368,375
-----------
Computer Software (1.5%):
9,000 Electronic Data Systems Corp............................... 552,375
-----------
Construction Materials (1.9%):
14,900 Sherwin-Williams Co. ...................................... 690,988
-----------
Electrical Equipment (7.1%):
13,000 AMP, Inc................................................... 503,750
7,000 Emerson Electric........................................... 630,875
7,500 General Electric Co........................................ 682,500
8,000 Intel Corp................................................. 763,500
-----------
2,580,625
-----------
Electronic Components (3.2%):
13,000 Arrow Electronics, Inc. (b)................................ 578,500
12,000 Varian Associates, Inc..................................... 576,000
-----------
1,154,500
-----------
Electronics (1.0%):
7,000 Motorola, Inc.............................................. 361,375
-----------
Financial Services (4.2%):
24,000 Capital One Financial Corp................................. 720,000
11,900 MGIC Investment Corp....................................... 801,762
-----------
1,521,762
-----------
Food & Related (4.0%):
15,600 ConAgra, Inc............................................... 768,300
19,300 Sara Lee Corp.............................................. 689,975
-----------
1,458,275
-----------
Forest & Paper Products (2.3%):
9,400 Kimberly-Clark Corp........................................ 828,375
-----------
Health Care--Drugs (5.9%):
12,000 American Home Products Corp................................ 765,000
7,500 Bristol-Myers Squibb Corp.................................. 722,813
9,600 Merck & Co., Inc........................................... 675,600
-----------
2,163,413
-----------
Hospital Supply & Management (2.1%):
13,300 Columbia HCA Healthcare Corp............................... 756,437
-----------
Household--General Products (1.8%):
22,500 Newell Co.................................................. 675,000
-----------
Insurance (8.0%):
7,000 Loews Corp................................................. 541,625
14,000 Reliastar Financial Corp................................... 665,000
19,300 Safeco Corp................................................ 675,500
11,600 Unum Corp.................................................. 743,850
16,000 Value Health, Inc. (b)..................................... 300,000
-----------
2,925,975
-----------
Leisure Time Industry (1.3%):
20,000 Brunswick Corp............................................. 480,000
-----------
Manufacturing (1.6%):
810 Imation Corp. (b).......................................... 19,845
8,100 Minnesota Mining & Manufacturing........................... 565,988
-----------
585,833
-----------
Motor Vehicles (1.7%):
11,000 General Motors Corp., Class H.............................. 635,250
-----------
</TABLE>
Continued
-14-
<PAGE>
THE COVENTRY GROUP
BRENTON VALUE EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ----------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Multiple Industry (1.6%):
21,000 Dial Corp.................................................. $ 288,750
21,000 Viad Corp.................................................. 294,000
-----------
582,750
-----------
Petroleum (4.6%):
7,500 Amoco Corp................................................. 528,750
4,100 Mobil Corp................................................. 474,575
8,000 Schlumberger Ltd........................................... 676,000
-----------
1,679,325
-----------
Retail (2.3%):
7,000 Dillard Department Stores.................................. 225,750
10,000 Tandy Corp. ............................................... 403,750
7,500 Toys R Us (b).............................................. 218,437
-----------
847,937
-----------
Retail-Food Stores (1.0%):
20,000 Casey's General Stores (b)................................. 350,000
-----------
Tobacco (1.6%):
6,515 Philip Morris, Inc......................................... 584,721
-----------
Utilities--Electric (6.2%):
12,500 AES Corp................................................... 492,188
29,000 Boston Edison Co........................................... 641,625
26,000 Houston Industries, Inc.................................... 575,250
28,800 Ohio Edison Co............................................. 558,000
-----------
2,267,063
-----------
Utilities--Gas & Pipeline (1.9%):
15,300 Sonat, Inc................................................ 677,025
-----------
Utilities--Telephone (4.4%):
14,800 General Telephone Electric Corp........................... 569,800
7,400 SBC Communications, Inc. (b).............................. 356,125
32,000 Worldcom, Inc. (b)........................................ 684,000
-----------
1,609,925
-----------
Wholesale (1.6%):
17,000 Sysco Corp................................................ 571,625
-----------
Total Common Stocks 33,217,179
-----------
INVESTMENT COMPANIES (9.1%):
1,701,677 Goldman Federal Money Market Portfolio................ 1,701,677
1,631,614 Goldman Sachs Treasury Obligations Money Market
Portfolio.............................................. 1,631,614
-----------
Total Investment Companies 3,333,291
-----------
Total (Cost--$30,529,129) (a) $36,550,470
===========
</TABLE>
- ------
Percentages indicated are based on net assets of $36,509,070.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........... $6,907,910
Unrealized depreciation........... (886,569)
----------
Net unrealized appreciation....... $6,021,341
==========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-15-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1.ORGANIZATION:
The Coventry Group (the "Group") was organized on January 8, 1992 as a
Massachusetts business trust, and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. Between the date of organization and the date
of commencement of operations of the Brenton U.S. Government Money Market
Fund, the Brenton Intermediate U.S. Government Securities Fund, the Brenton
Intermediate Tax-Free Fund, and the Brenton Value Equity Fund,
(individually, a "Fund"; collectively, the "Funds"), each a series of the
Group, the Funds earned no investment income and had no operations other
than incurring organizational expenses.
The Money Market Fund's investment objective is to seek current income
consistent with maintaining liquidity and stability of principal. The Money
Market Fund invests exclusively in short-term U.S. Treausry bills, notes and
other short-term obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities ("U.S. Government Obligations"). The
investment objective of the Intermediate Government Fund is to seek total
return consistent with the production of current income and the preservation
of capital. The Intermediate Government Fund invests primarily in U.S.
Government Obligations and will maintain a dollar-weighted average porfolio
maturity of 3 to 10 years. The investment objective of the Tax-Free Fund is
to seek current income, consistent with the preservation of capital, that is
exempt from federal income taxes to the extent described in this Prospectus.
The Tax-Free Fund invests primarily in a diversified porfolio of
intermediate-term tax-free fixed income securities and will maintain a
dollar-weighted average porfolio maturity of 3 to 10 years. The investment
objective of the Equity Fund is long-term capital appreciation. The Equity
Fund invests primarily in a diversified portfolio of equity securities.
The Group is authorized to issue an unlimited number of shares which are
units of beneficial interest with a par value of $0.01 per share. Sales of
shares of the Funds may be made to the general public.
2.SIGNIFICANT ACCOUNTING PRINCIPLES:
The following is a summary of significant accounting policies followed by
the Company in preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses for
the period. Actual results could differ from those estimates.
SECURITIES VALUATION:
Investments of the U.S. Government Money Market Fund are valued at either
amortized cost, which approximates market value, or at original cost
which, combined with accrued interest, approximates
Continued
-16-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1996
(UNAUDITED)
market value, or at original cost which, combined with accrued interest,
approximates market value. Under the amortized cost valuation method,
discount or premium is amortized on a constant basis to the maturity of
the security. In addition, the U.S. Government Money Market Fund may not
(a) purchase any instrument with a remaining maturity greater than
thirteen months unless such investment is subject to a demand feature, or
(b) maintain a dollar-weighted-average portfolio maturity which exceeds
90 days.
Investments in common and preferred stocks, commercial paper, corporate
bonds, municipal bonds, and U.S. Government securities and U.S.
Government agency securities of the Intermediate U.S. Government
Securities Fund, the Intermediate Tax-Free Fund, and the Value Equity
Fund (collectively "the variable net asset value funds") are valued at
their market values determined on the basis of the latest available bid
quotation in the principal market (closing sales prices if the principal
market is an exchange) in which such securities are normally traded.
Investments in investment companies are valued at their respective net
asset values as reported by such companies. Securities, including
restricted securities, for which market quotations are not readily
available, are valued at fair market value by the investment adviser
under the supervision of the Group's Board of Trustees. The difference
between the cost and market values of investments held by the variable
net asset value funds are reflected as either unrealized appreciation or
depreciation.
SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization
of premium or discount. Dividend income is recorded on the ex-dividend
date. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
REPURCHASE AGREEMENTS:
The Funds may acquire repurchase agreements from financial institutions
such as banks and broker dealers which the investment adviser deems
creditworthy under guidelines approved by the Board of Trustees, subject
to the seller's agreement to repurchase such securities at a mutually
agreed-upon date and price. The repurchase price generally equals the
price paid by a Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller, under a repurchase
agreement, is required to maintain the value of collateral held pursuant
to the agreement at not less than the repurchase price (including accrued
interest). Securities subject to repurchase agreements are held by the
Fund's custodian or another qualified custodian or in the Federal
Reserve/Treasury book-entry system. Repurchase agreements are considered
to be loans by a Fund under the 1940 Act.
Continued
-17-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1996
(UNAUDITED)
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly
for the U.S. Government Money Market Fund. Dividends from net investment
income are declared and paid monthly for the Intermediate U.S. Government
Securities Fund and the Intermediate Tax-Free Fund. Dividends from net
investment income are declared and paid quarterly for the Value Equity
Fund. Distributable net realized capital gains, if any, are declared and
distributed at least annually by each Fund.
Dividends from net investment income and from net realized capital gains
are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are
primarily due to differing treatments for organization costs, expiring
capital loss carryforwards and deferrals of certain losses.
FEDERAL INCOME TAXES:
It is the policy of each of the Funds to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of net investment income and net
realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
OTHER:
Expenses that are directly related to one of the Funds are charged
directly to that Fund. Expenses relating to the Funds collectively are
prorated to the Funds on the basis of each Fund's relative net assets.
Other expenses for the Group are prorated to the Funds and any other
portfolios of the Group on the basis of relative net assets.
ORGANIZATION COSTS:
All expenses in connection with the Funds' organization and registration
under the 1940 Act and the Securities Act of 1933 were paid by the Funds.
Such expenses are being amortized over a period of two years commencing
with the date of the initial public offering.
3.PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
six months ended September 30, 1996 are as follows:
Continued
-18-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PURCHASES SALES
---------- -----------
<S> <C> <C>
Intermediate U.S.Government Securities Fund........... $9,234,579 $10,982,318
Intermediate Tax-Free Fund............................ $ 614,040 $ 517,024
Value Equity Fund..................................... $6,460,239 $ 4,436,463
</TABLE>
4.RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Group by Brenton Bank.
Under the terms of the investment advisory agreement, Brenton Bank is
entitled to receive fees computed daily based on a percentage of the average
net assets of each Fund. Brenton Bank also serves as custodian to the Funds.
The Northern Trust Company serves as sub-investment adviser to the U.S.
Government Money Market Fund. For such services, the Northern Trust Company
receives a fee computed daily and paid monthly by the Adviser at an annual
rate at of 0.08% of the U.S. Government Money Market Fund's average daily
net assets.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio Limited Partnership, and BISYS Fund Services Ohio, Inc. ("BISYS
Ohio") are subsidiaries of the BISYS Group, Inc.
BISYS, with whom certain officers and trustees of the Group are affiliated,
serves the Funds as administrator. Such officers and trustees are paid no
fees directly by the Funds for serving as officers and trustees of the
Group. Under the terms of the administration agreement, BISYS's fees are
computed daily as a percentage of the average net assets of each of the
Funds.
BISYS Ohio serves as transfer agent to the Funds. Under the terms of the
transfer agency agreement, BISYS Ohio is entitled to receive fees based upon
a specified amount per shareholder with specified minimum per portfolio
amounts and surcharges, plus certain out-of-pocket expenses. BISYS Ohio also
serves as fund accountant. Under the terms of the fund accounting agreement,
BISYS Ohio receives fees monthly at an annual rate of $30,000 for the U.S.
Government Money Market Fund, the Intermediate U.S. Government Securities
Fund, and the Value Equity Fund, and $40,000 for the Intermediate Tax-Free
Fund, plus certain out-of-pocket expenses.
The Funds have adopted a Distribution and Shareholder Service Plan in
accordance with Rule 12b-1 under the 1940 Act, pursuant to which the Funds
are authorized to pay or reimburse BISYS, as distributor, a periodic amount,
calculated at an annual rate not to exceed 0.50% of the average daily net
asset value of the Funds. These fees are used by BISYS to pay banks,
including Brenton Bank, broker dealers and other institutions, or to
reimburse BISYS or its affiliates, for administration, distribution and
shareholder services in connection with the distribution of Fund shares.
Fees may be voluntarily reduced or reimbursed to assist the Funds in
maintaining competitive expense ratios.
Continued
-19-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1996
(UNAUDITED)
Information regarding these transactions is as follows for the period from
April 1, 1996 to September 30, 1996:
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE VALUE
MONEY MARKET SECURITIES TAX-FREE EQUITY
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ADVISORY
FEES:
Annual fee before
voluntary fee
reductions (percentage 0.40% of first 0.50% of first 0.40% of first 0.74% of first
of average net
assets)................ $250 million $25 million $25 million $25 million
0.30% in excess 0.30% in excess 0.30% in excess 0.60% in excess
Voluntary fee
reductions............. $39,059 -- $14,679 --
Reimbursements.......... -- -- $18,876 --
ADMINISTRATION FEES:
Annual fee (percentage
of average net assets). 0.20% 0.20% 0.20% 0.20%
DISTRIBUTION AND
SHAREHOLDER SERVICES
FEES:
Annual fee before
voluntary fee
reductions (percentage
of average net assets). 0.50% 0.50% 0.50% 0.50%
Voluntary fee
reductions............. $70,305 $74,919 $18,349 $76,619
TRANSFER AGENT FEES:.... $16,536 $13,905 $10,509 $20,910
FUND ACCOUNTANT FEES:... $15,184 $16,831 $24,209 $15,916
CUSTODIAN FEES:......... $6,614 $3,842 $915 $3,657
</TABLE>
-20-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT U.S. GOVERNMENT
MONEY MARKET FUND SECURITIES FUND
------------------------------------ -----------------------------------
SIX MONTHS YEAR AUGUST 10, SIX MONTHS YEAR AUGUST 10,
ENDED ENDED 1994 TO ENDED ENDED 1994 TO
SEPTEMBER 30, MARCH 31, MARCH 31, SEPTEMBER 30, MARCH 31, MARCH 31,
1996 1996 1995 (A) 1996 1996 1995 (A)
------------- --------- ---------- ------------- --------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 10.14 $ 9.99 $ 10.00
------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.023 0.050 0.028 0.29 0.59 0.35
Net realized and
unrealized gains
(losses) from
investments........... -- -- -- (0.13) 0.15 (0.02)
------- ------- ------- ------- ------- -------
Total from Investment
Activities........... 0.023 0.050 0.028 0.16 0.74 0.33
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.023) (0.050) (0.028) (0.29) (0.59) (0.34)
Net realized gains from
investments........... -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total Distributions... (0.023) (0.050) 0.028 (0.29) (0.59) (0.34)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 1.00 $ 1.00 $ 1.00 $ 10.01 $ 10.14 $ 9.99
======= ======= ======= ======= ======= =======
Total Return (excludes
sales charge).......... 2.30%(b) 5.12% 2.84%(b) 1.63%(b) 7.48% 3.42%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000).......... $32,185 $35,436 $27,810 $32,662 $34,390 $16,438
Ratio of expenses to
average
net assets............ 0.78%(c) 0.75% 0.97%(c) 1.03%(c) 1.07% 1.53%(c)
Ratio of net investment
income to average net
assets................ 4.56%(c) 4.99% 4.37%(c) 5.77%(c) 5.82% 5.71%(c)
Ratio of expenses to
average
net assets*........... 1.48%(c) 1.46% 1.66%(c) 1.48%(c) 1.55% 2.03%(c)
Ratio of net investment
income to average net
assets*............... 3.86%(c) 4.28% 3.68%(c) 5.32%(c) 5.34% 5.21%(c)
Portfolio Turnover..... -- -- -- 28.86% 30.85% 20.69%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
-21-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE
TAX-FREE FUND VALUE EQUITY FUND
----------------------------------- -----------------------------------
SIX MONTHS YEAR AUGUST 10, SIX MONTHS YEAR AUGUST 10,
ENDED ENDED 1994 TO ENDED ENDED 1994 TO
SEPTEMBER 30, MARCH 31, MARCH 31, SEPTEMBER 30, MARCH 31, MARCH 31,
1996 1996 1995 (A) 1996 1996 1995 (A)
------------- --------- ---------- ------------- --------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $10.17 $ 9.98 $10.00 $ 12.95 $ 10.83 $ 10.00
------ ------ ------ ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.21 0.39 0.15 0.06 0.10 0.09
Net realized and
unrealized gains
(losses) from
investments........... (0.06) 0.19 (0.03) 0.63 2.70 0.83
------ ------ ------ ------- ------- -------
Total from Investment
Activities........... 0.15 0.58 0.12 0.69 2.80 0.92
------ ------ ------ ------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.21) (0.39) (0.14) (0.06) (0.10) (0.09)
Net realized gains from
investments........... -- -- -- -- (0.58) --
------ ------ ------ ------- ------- -------
Total Distributions... (0.21) (0.39) (0.14) (0.06) (0.68) (0.09)
------ ------ ------ ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $10.11 $10.17 $ 9.98 $ 13.58 $ 12.95 $ 10.83
====== ====== ====== ======= ======= =======
Total Return (excludes
sales charge).......... 1.52%(b) 5.87% 1.27%(b) 5.33%(b) 26.13% 9.25%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000).......... $7,470 $7,403 $6,408 $36,509 $32,353 $15,628
Ratio of expenses to
average
net assets............ 0.75%(c) 1.03% 2.47%(c) 1.30%(c) 1.45% 1.80%(c)
Ratio of net investment
income to average net
assets................ 4.20%(c) 3.88% 2.41%(c) 0.93%(c) 0.83% 1.39%(c)
Ratio of expenses to
average
net assets*........... 2.16%(c) 2.27% 2.97%(c) 1.75%(c) 1.92% 2.30%(c)
Ratio of net investment
income to average net
assets*............... 2.79%(c) 2.63% 1.91%(c) 0.48%(c) 0.36% 0.89%(c)
Portfolio Turnover..... 7.22% 7.15% 3.03% 13.53% 43.80% 18.30%
Average commission rate
paid.................. NA NA NA 0.0824(d) -- --
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged. Disclosure not required for prior
periods.
NA--Not Applicable
See notes to financial statements.
-22-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
Results of Special Shareholder Meeting (Unaudited)
On April 22, 1996, a special meeting of the shareholders of Coventry Group
was held to consider the election of five Trustees. The results of such vote
are as follows:
<TABLE>
<CAPTION>
NOMINEE IN FAVOR OPPOSED ABSTAIN
- ------- ----------- --------- ---------
<S> <C> <C> <C>
Nancy E. Converse............................... 202,251,129 1,230,319 1,084,021
Walter B. Grimm................................. 202,251,129 1,230,319 1,084,021
Maurice G. Stark................................ 202,251,129 1,230,319 1,084,021
Michael M. VanBuskirk........................... 202,251,129 1,230,319 1,084,021
Chalmers P. Wylie............................... 202,251,129 1,230,319 1,084,021
</TABLE>
-23-
<PAGE>
INVESTMENT ADVISER
Brenton Bank
2840 Ingersoll
Des Moines, Iowa 50312
ADMINISTRATOR AND DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
AUDITORS
Ernst & Young LLP
10 West Broad Street
Suite 2300
Columbus, Ohio 43215
[LOGO
of BRENTON MUTUAL FUNDS]
[LOGO
of BRENTON BANK]
Investment Adviser
SEMI-ANNUAL REPORT
TO
SHAREHOLDERS
SEPTEMBER 30, 1996
